The labor market remains in a poor situation. The National Institute of Statistics (INE) reported at the end of July that the unemployment rate for the April-June quarter was 9.4%, increasing by 0.5 percentage points (pp.) over twelve months, but remaining the same compared to the immediately previous quarter. In this way, three months have been completed with a figure above 9%. Furthermore, it remains at its highest levels in five years. And now, the prospects for what is to come continue to be unpromising. This is evident from some leading indicators, such as the Labor Notices Index published monthly by the Central Bank. In July, this index reached 69.3 points, which implies an annual decrease of 10.5%, completing nine consecutive months of contractions. Additionally, this index level is the lowest for a July since 2020, during the pandemic and amidst quarantines, when it reached 51.8 points. Another data point from the figures is the 1.9% decline compared to June, although experts indicate that this comparison should be taken with more caution, as there are always seasonal effects. Therefore, the more relevant variation is over 12 months. This indicator corresponds to the simple average of the notices published on the main online job portals in Chile, with nationwide coverage, and allows monitoring how employment will be with the job offers posted online month by month. The index generally shows a behavior similar to what happens with the salaried employment data from the INE Employment Survey, although with a lag, which can be greater than a month, due to the time it takes to fill vacancies. What's coming Carmen Cifuentes, economist at Clapes-UC, states that this indicator "again provides a worrying signal about the weakness of demand for work. In July, the index fell 10.5% compared to the same month last year, completing nine consecutive months of contractions. More than a one-time drop, this persistence shows that companies still have a low willingness to open new vacancies." "This is consistent with a labor market that has not yet managed to consolidate a recovery. The unemployment rate remains high, at 9.4%, and although total employment is growing, it does so at a limited pace and with significant support from self-employment and informal private salaried work. In this context, the continued decline in job notices makes it difficult to anticipate a significant reduction in unemployment in the coming months," says the expert. For his part, Mauricio Tejada, academic at Diego Portales University, adds that "the figures of job notices confirm what we already know from employment data: the problem is more concentrated in demand for work, not so much in supply. In July, the index fell 10.5% compared to the same month last year, the most negative record in recent months, and also declined 1.9% compared to June. This rules out the recovery trend shown the previous month." The academic indicates that this "is consistent with a market where employment grows just 0.9%, and that growth is mainly explained by self-employment and, to a lesser extent, informal salaried workers, with an unemployment rate of 9.4%. In other words: formal employment, precisely the one sought through notices, is not being created. These data correspond to June." In fact, the INE reported at the end of July that although 81,778 jobs were created in the April-June quarter, breaking down this figure reveals a destruction of 32,800 formal jobs, chaining four consecutive months of decline. Thus, all new jobs were informal, reaching 114,000, which represents a 4.7% increase over 12 months, its highest rise since April-June 2022, and a total of 2,537,804 people working informally. "Vacancy indices are volatile month to month, but when the negative signal is repeated systematically, it ceases to be noise and becomes a trend. For a worker, this means that the probability of finding formal employment is decreasing, and search times are lengthening. On the other hand, with more applicants per vacancy, companies face less competitive pressure and gain bargaining power, which tends to moderate wage growth. These are not good news," adds Tejada. NEWSLETTER Pulso PML Monday to Friday, 12:30 PM The most relevant in markets, companies, and business: timely information, context, and content to make better decisions. By subscribing, you accept the Terms and Conditions and Privacy Policies of La Tercera.